The Role of Zakat to Strengthen The Rural Mustahiq Community Based on Entrepreneurship Puskas Working Paper Series (PWPS) 2018

Abstract

Poverty still become one of big problems in Indonesia. In 2016, poor people percetage is 7.73% for urban area and 13.96% for rural area. The data depict a quire big gap in poverty percentage between the poor people in urban area and rural area. Whereas, the rural area has big indutry potential, up until 2015 there are 3,385,851 Micro Enterprises and 283,022 Small Enterprises in Indonesia. Besides, the other large potential of rural area is the lower production cost of raw materials that obtained directly from the farmer and cattleman.Villages with fertile farming can optimize the potential by forming a farmers community. Later, farmers community could be expanded to the enterprises activity by proliferate harvested product. One such example is in the community of Dayeuh Luhur Village, Sumedang District, which processes low-cost ro’id bananas to be produced into banana chips. However, the crucial constraints freuqently faced by villagers, especially mustahiq, is the difficulty to obtain the capital to develop a business. In this case, zakat as an Islamic financial instrument can be a source of funds assistance for rural mustahiq communities. Zakat is a big source of social funds, where the potential of zakat in Indonesia reaches 217 trillion rupiah (Firdaus et al 2011). Zakat funds are more accessible to mustahiq than conventional banking services that tend to target upper middle-class society. Thus, the disbursement of zakat in the form of productive program can be positively correlated in strengthening the potential of rural mustahiq entrepreneurship.